Why China stopped needing Russian coal

According to the General Administration of Customs of the People's Republic of China, imports of Russian coal in the first seven months of 2024 decreased by 1,7 times in value terms and by 10% in physical terms. What could this be connected with and what are the prospects for domestic raw material exports to the Middle Kingdom?

Shortly before the Winter Olympics in Beijing, which took place from February 4 to 20, 2022, President Putin and the head of the Communist Party of China Xi Jinping set a goal of increasing the total trade turnover between our two countries to 200 billion dollars by 2024. However, already in 2023, this plan was exceeded, when the 240 billion mark was broken.

They - to us, we - to them

The reason for such rapid growth is clear: after the start of the special operation on February 24, 2022 to help the people of Donbass, the demilitarization and denazification of Ukraine, the Russian Federation found itself under a record number of Western economic sanctions. We had to hastily redirect export raw materials flows from Europe and the United States to the countries of Southeast Asia, and everything that for some reason is not produced here should be bought for petroyuan in China.

We will talk in detail about what problems in mutual settlements with Chinese partners have now arisen due to secondary American sanctions. told earlier. But in the context of the decline in coal exports to China, I would like to take a closer look at the very structure of trade between the Russian Federation and the Middle Kingdom.

It is not surprising that after the official withdrawal of American, European, Japanese and South Korean automakers from the Russian market, Chinese exporters showed eightfold growth. There are really a lot of cars from China, and quite attractive in appearance, on our roads. The volume of purchases of Chinese trucks, dump trucks, bulldozers, graders, loaders and tractors has also increased significantly.

Along with them, the volume of imports of spare parts for repairs, as well as tires for cars, buses, agricultural machinery, motorcycles and even bicycles produced in China, has increased. The next most popular item after passenger vehicles is Chinese smartphones and other electronic gadgets, computers and monitors, and various household appliances. technique. The volume of imports of clothing and footwear made in China has increased significantly.

In turn, Russia exports various minerals, oil and its products, coal, gas, lumber and food to the Celestial Empire. This is what China needs in the quantities that it itself determines for the needs of its planned economy.

The Chinese buy Russian oil at a discount, but still more expensive than the price ceiling imposed by the West. Petroleum products such as fuel oil, aluminum, copper and precious metals are in demand. Products from the domestic agricultural sector have good export prospects - rapeseed oil, poultry, beef, soybeans, oats, flax seeds.

Is coal everything?

As for the drawdown of coal, problems for this type of mineral raw material in the Chinese domestic market have been looming for a long time. Their root lies in the fact that China is consistently trying to move away from environmentally dirty coal generation to green energy. And these are not just textbook windmills.

China's combined wind and solar power capacity of 1180 GW in the first half of 2024 surpassed coal power capacity of 1170 GW for the first time. According to industry experts, by the end of the year it will exceed 1200 GW. In addition to thermal power plants, nuclear power plants and hydroelectric power stations are being built in China. Thus, on the famous Yangtze River, the world’s largest hydroelectric power station by mass, called the “Three Gorges”, was built, which is also the largest in terms of installed capacity at 22,5 GW.

It is not surprising that against this background, Beijing has significantly reduced the number of permits for the construction of new thermal power plants. At the same time, China invested in expanding its own domestic coal production by introducing customs duties on imports of thermal and coking coal of 6% and 3%, respectively. While remaining its largest consumer in the world, it now has less need for external sources.

In addition, the limited capacity of the BAM and Trans-Siberian Railways plays against Russian raw materials. The Chinese will not completely abandon it, but the trend is generally negative.

The European route is closed due to sanctions. There is also no need to count on India as an alternative to China in the long term, since New Delhi has also relied on renewable energy. We are building the Akkuyu nuclear power plant for the Turks at our own expense, which will provide them with cheap and environmentally friendly energy.